Portugal on a Budget? The Real Costs, Overrated Spots, and Where to Actually Spend Your Money

Introduction

A few years ago, Portugal was one of Europe’s last true budget-friendly destinations. You could get a meal for a few euros, stay in a charming guesthouse for under €50, and explore stunning landscapes without the crowds (or the price tags) of France, Italy, or Spain. But that’s changing—fast.

Tourism in Portugal has exploded in the past decade. Lisbon and Porto are packed with digital nomads and weekend tourists, Airbnb prices have skyrocketed, and restaurants in tourist-heavy areas now charge almost the same as in Paris. Add in hidden fees, tourist traps, and a growing divide between local prices and what visitors pay, and you start to wonder: is Portugal still the bargain people claim it to be?

After traveling through the country multiple times—staying in both cheap guesthouses and overpriced Airbnbs, eating at local tascas and tourist-filled restaurants, and testing everything from public transport to rental cars—I’ve seen both sides of Portugal. There are still ways to travel on a budget here, but you have to know where to spend and where to save.

This guide breaks down the real costs of traveling in Portugal, the overrated experiences you should skip, and the places actually worth your time and money. If you're expecting €1 beers and €5 dinners, you’re going to be disappointed. But if you’re smart about where you go and what you pay for, Portugal can still be an incredible destination without draining your budget.

Let’s get into it.

The Real Costs of Traveling in Portugal

The first time I visited Portugal, I had a vision of an affordable European escape—a place where I could eat incredible food for cheap, stay in charming guesthouses without breaking the bank, and sip €1 beers while watching the sunset over the Atlantic.

That’s not exactly how it went.

Don’t get me wrong—Portugal can be budget-friendly, but only if you know what you're doing. If you follow the tourist trail blindly, you’ll end up paying €12 for a tiny glass of wine in Lisbon, €150 a night for an Airbnb that looked affordable until the hidden fees kicked in, and €50 on a boat tour that could have been done for half the price. I learned quickly that Portugal’s affordability depends entirely on where you go, where you eat, and how you get around.

So let’s talk about what it actually costs to travel here.

Accommodation: The Budget-Friendly Days Are Fading

I still remember the shock of searching for a place to stay in Lisbon. The city used to be a haven for budget travelers, but now? Prices rival Barcelona and Rome, especially in the historic center. If you’re hoping for a cute, budget-friendly Airbnb, prepare to be hit with service fees, cleaning fees, and checkout rules so strict you’d think you were renting a museum exhibit.

• Hostels: Still the best deal—€20–€40 a night for a dorm bed, but expect to pay closer to €50+ in high season in Lisbon or Porto.
• Budget hotels & guesthouses: €50–€100 per night, though in Lisbon, anything under €70 is usually either far from the center or aggressively “vintage” (aka falling apart).
• Airbnb traps: A listing might say €80 per night, but after fees, you’re looking at €120+. Some hosts even charge extra for heating in winter, which, in a country where insulation is an afterthought, is borderline criminal.

If you want to keep costs down, stay outside the main tourist zones—I found a great guesthouse in Almada (just across the river from Lisbon) for €60 a night, half the price of anything in the center.

Food & Drinks: A Tale of Two Price Tags

Food in Portugal can be amazing and cheap—but only if you eat like a local. The moment you step into a restaurant with an English menu, Instagrammable décor, and a waiter calling you in from the street, expect to overpay for average food.

One night in Lisbon, I made the mistake of sitting down at a restaurant near Praça do Comércio. I ordered grilled fish and a glass of wine—pretty standard. The bill? €35. That same meal at a small tasca (local eatery) a few blocks away? €12.

Here’s what to expect price-wise:

• Bargain eats:
  • A bifana (pork sandwich) or prego (steak sandwich) – €3–€5, and absolutely delicious.
  • Pastel de nata (custard tart) – Around €1–€1.50—but don’t buy it from tourist traps. Find a local bakery.
  • Set lunch menus (Prato do Dia) – Many places offer €10–€15 menus that include soup, a main dish, a drink, and coffee.
• Tourist-priced meals:
  • Dinner at a trendy restaurant in Lisbon or Porto – Expect to pay €25–€40 per person.
  • A cocktail in a “cool” bar? €10–€12.
  • A glass of wine in a touristy restaurant? €6–€8—which is ridiculous when you can buy a bottle of great Portuguese wine for the same price at a supermarket.

Lesson learned: Eat at tascas, bakeries, and smaller restaurants off the main streets. And if a place has a guy outside aggressively inviting you in, run.

Transport: Cheap and Efficient—Unless You Rent a Car

Public transport in Portugal is one of the few things that’s still refreshingly affordable. Getting around Lisbon and Porto is cheap and easy, but if you’re thinking about renting a car, prepare for a financial headache.

• Public transport prices:
  • Metro in Lisbon/Porto: €1.80 per ride, or €6.60 for a 24-hour pass (which includes trams and buses).
  • Intercity trains: Lisbon to Porto for €20–€30 (cheaper if booked in advance).
  • Trams: The famous Tram 28 in Lisbon? It’s packed with tourists and pickpockets. Take Tram 12 instead for the same experience, minus the chaos.

Then there’s renting a car, which seems like a good idea until you see the extra charges.

• Base rental price? €15–€30 per day. Sounds great, right?
• Then come the hidden costs:
  • Fuel is €1.75+ per liter, which adds up fast.
  • Tolls are everywhere, and many highways require electronic toll payments, which rental companies charge extra to process.
  • Parking in Lisbon and Porto is a nightmare. I paid €15 for four hours of parking in Porto, which hurt more than the overpriced cocktails.

Unless you're planning to explore rural Portugal or the Algarve, you don’t need a car. Take the train instead.

Attractions & Activities: What’s Worth It, What’s Overpriced

Some of Portugal’s best experiences are completely free—walking through Alfama’s winding streets, hiking the cliffs of the Algarve, or watching the sunset from a miradouro in Lisbon. But some attractions charge more than they’re worth.

• Totally worth it:
  • Sintra’s Quinta da Regaleira (€12) – Less crowded than Pena Palace, and way more magical.
  • Beaches & hiking – Completely free and better than any paid experience.
  • Monasteries & castles in smaller towns (€5–€8) – Beautiful, underrated, and crowd-free.
• Overpriced & overhyped:
  • Pena Palace (€14+) – It looks great in photos, but inside? Overcrowded, expensive, and not as magical as it seems.
  • Time Out Market – It’s just a fancy food court with tourist prices.
  • Algarve boat tours (€30–€50) – Nice, but you can visit better beaches for free.

Overrated Spots That Aren’t Worth the Hype

If there’s one thing I’ve learned about traveling in Portugal, it’s that not everything is as magical as Instagram makes it seem. Some places are absolutely worth your time and money, but others? Overcrowded, overpriced, and totally underwhelming.

I’ve fallen into a few of these traps myself—standing in line for Sintra’s Pena Palace only to be herded through rooms like cattle, crammed into Lisbon’s Tram 28 with sweaty tourists and pickpockets, and paying far too much for a mediocre meal at Time Out Market. If I could go back, I’d skip half these places and spend more time where Portugal actually feels authentic.

Here’s what’s not worth the hype.

1. Lisbon’s Tram 28: A Tourist Magnet with Pickpockets

I get it. The yellow trams are iconic. Every guidebook tells you Tram 28 is the best way to see Lisbon, winding through the city’s historic hills. What they don’t tell you? You’ll be packed in so tightly that you won’t actually see anything.

• Crowded year-round – Unless you get on at the first stop, expect to wait in line for 30–40 minutes.
• Theft hotspot – Pickpockets work this tram every single day. If you’re distracted by the view, your wallet might not make it to the next stop.
• Better alternatives – Take Tram 12 (same views, fewer people) or just walk—the best parts of Lisbon are best explored on foot anyway.

2. Pena Palace in Sintra: Beautiful, But Not Worth the Stress

If you’ve ever seen a fairy-tale castle perched on a hill in Portugal, it was probably Pena Palace. And yes, it looks stunning in photos. The problem? Visiting is a logistical nightmare.

• Massive crowds – Even in the off-season, it’s packed. In summer, expect to wait over an hour just to enter.
• Expensive and chaotic – €14 for a ticket, plus an extra fee for the shuttle to the entrance. Once inside, you’ll be pushed through rooms in a slow-moving line, with barely enough space to take a photo.
• Better alternative: Quinta da Regaleira (€12) – Equally magical, way fewer crowds, and full of hidden tunnels and gardens that actually make you feel like you’re exploring something special.

3. Time Out Market: A Fancy Food Court That’s Overpriced & Overrated

Before my first trip to Lisbon, people kept telling me, “You HAVE to go to Time Out Market!” I imagined a vibrant food hall with local vendors selling authentic Portuguese dishes. Instead, I found a glorified, overpriced food court packed with tourists.

• Crowded at all hours – Good luck finding a seat.
• Expensive for what it is – Most dishes cost €10–€15, double what you’d pay at a local tasca.
• Tourist version of Portuguese food – Sure, it’s well-presented, but it lacks the charm of a real family-run Portuguese restaurant.

Better alternative: Walk 10 minutes in any direction and eat at a local tasca for half the price.

4. Algarve in Peak Season: Paradise? Not When You’re Fighting for Sand Space

The Algarve is famous for its golden beaches, dramatic cliffs, and crystal-clear waters. Sounds perfect, right? It is—if you come in the off-season. If you visit in July or August, you’ll find:

• Packed beaches where you can barely find a spot for your towel.
• Overpriced accommodation – Hotels and Airbnbs double in price in summer.
• Traffic and parking nightmares – Trying to park in Lagos or Albufeira? Good luck.

Better alternative: Visit in May, June, or September for the same stunning beaches without the chaos.

5. Overpriced Wine Tours in Porto: You’re Paying for the Name, Not the Experience

Porto is famous for its port wine, and every tourist ends up doing a wine cellar tour in Vila Nova de Gaia. But after doing a couple myself, I realized something: some of these tours are just expensive branding exercises.

• Factory-line experiences – Some of the bigger names (Sandeman, Graham’s) feel impersonal. You get a rushed tour and a small tasting, but you’re really paying for the name.
• €15–€30 for a tiny tasting – Some tours charge premium prices for two or three tiny samples.
• Better alternative: Skip the big names and visit smaller, family-run wineries where you actually get to talk to the winemakers and enjoy a more intimate experience.

Where to Actually Spend Your Money

If you’re going to splurge on anything in Portugal, make it worthwhile. There are experiences that are genuinely amazing, give you real cultural insight, and don’t feel like a tourist conveyor belt. Some of my best moments in Portugal weren’t at the big-name attractions but in the small, unexpected places where locals actually go.

Here’s where your money is better spent.

1. Local Tascas & Bakeries – The Best Cheap Eats in Portugal

If there’s one thing you should do in Portugal, it’s eat like a local. Forget the overpriced tourist menus—some of the best meals I had were in tiny, family-run tascas where the food was simple, fresh, and ridiculously cheap.

Some absolute gems:

• Zé dos Cornos (Lisbon) – €10–€12 for a massive plate of grilled meat, rice, and fries. No frills, just damn good food.
• Cervejaria Gazela (Porto) – Home of the legendary cachorrinhos (spicy mini hot dogs) for just a few euros.
• O Buraco (Porto) – A no-nonsense spot with fresh fish for under €10.
• Any random bakery – Get a bifana (pork sandwich) for €3–€5 and a pastel de nata for €1.50 and call it a perfect breakfast.

Why this is worth it:

• You’ll eat better, spend less, and experience real Portuguese food—not the overpriced, watered-down version meant for tourists.
• The portions are massive. You’ll never leave hungry.

2. Less Touristy Beaches – Skip the Crowds, Keep the Beauty

The Algarve is beautiful, but in peak season? No thanks. If you want Portugal’s stunning beaches without fighting for towel space, head to less touristy coastlines.

Best alternative beach spots:

• Costa Vicentina – Just north of the Algarve, this region has the same dramatic cliffs and wild beaches—but without the Instagram hordes.
• Comporta – One hour south of Lisbon, this is where Lisbon’s rich locals escape to. White sand, clear water, and zero tour buses.
• Ericeira – A laid-back surf town with incredible beaches and a more relaxed vibe than the Algarve.

Why this is worth it:

• You avoid the overpriced Algarve hotels and tourist crowds.
• The scenery is just as breathtaking, but with a more authentic feel.

3. Public Transport Passes – A Smarter Way to Get Around

I learned the hard way that buying single metro or bus tickets in Lisbon is a waste of money. If you’re staying for more than a day, get a public transport pass instead—it’s cheaper and way more convenient.

• Lisbon & Porto 24-hour pass – €6.60 and includes metros, trams, and buses. Way better than paying €1.80 per ride.
• Intercity train tickets (book in advance!) – A Lisbon to Porto train can cost €20 instead of €50 if booked early.

Why this is worth it:

• You’ll save money, especially if you’re using trams and buses.
• No need to worry about change or single tickets—just tap and go.

4. Hidden Gem Cities – More Culture, Fewer Crowds

Lisbon and Porto are great, but Portugal’s best-kept secrets are its smaller cities—cheaper, less touristy, and full of history.

Some of my favorites:

• Évora – A medieval town with Roman ruins, whitewashed streets, and a chapel made of bones (yes, human bones).
• Guimarães – Portugal’s birthplace, with a castle and an authentic, old-world feel.
• Coimbra – A university town with stunning libraries, medieval alleys, and a fraction of Lisbon’s prices.

Why this is worth it:

• You’ll spend less on accommodation, food, and attractions.
• These towns are just as beautiful as Lisbon and Porto but way more relaxed.

5. Free Attractions That Are Actually Incredible

One of the best things about Portugal? Some of the most stunning experiences don’t cost a thing.

• Miradouros (Viewpoints in Lisbon & Porto) – Sunset views over the city, totally free.
• Hiking in Sintra or the Douro Valley – Forget the pricey tours—just explore on foot.
• Churches & cathedrals – Many are free, and the architecture is breathtaking.
• Local markets – Even if you don’t buy anything, they’re a great place to experience real Portuguese life.

Why this is worth it:

• It saves money while still giving you the best of Portugal.
• Some of Portugal’s best experiences aren’t in museums or guided tours—they’re in its landscapes, streets, and culture.

How to Save Money & Avoid Common Travel Mistakes

No matter how budget-conscious you are, it’s easy to overspend in Portugal if you don’t know the local tricks. The country isn’t as cheap as people claim, and if you follow the tourist trail blindly, you’ll find yourself paying double or even triple what locals do.

On my first trip to Portugal, I made some classic mistakes—staying in overpriced Airbnbs, getting ripped off at restaurants, and spending money on things that weren’t worth it. The good news? You can easily avoid these traps with a few simple strategies.

1. Stay Outside Lisbon & Porto’s Tourist Centers

Accommodation prices in Lisbon and Porto have gone through the roof. If you try to stay in the historic centers (like Baixa or Alfama in Lisbon, or Ribeira in Porto), you’ll be paying top dollar for tiny rooms.

A much smarter move? Stay just outside the center—you’ll save 30–50% on accommodation, and public transport is so cheap and efficient that you won’t miss out.

Best alternatives:

• Lisbon: Stay in Almada (just across the river) or in neighborhoods like Alvalade or Campo de Ourique—still local, still charming, but way cheaper than Baixa or Bairro Alto.
• Porto: Instead of Ribeira, stay in Vila Nova de Gaia (across the river) or Bonfim, an up-and-coming area with great cafés and local vibes.

Why this saves you money:

• Hotels and Airbnbs are significantly cheaper.
• You avoid overpriced tourist restaurants in the main areas.
• Public transport is cheap, so a 10-minute metro ride is nothing compared to the savings.

2. Avoid Eating in Tourist Hotspots (And Know Where Locals Eat)

If a restaurant has a waiter outside aggressively inviting you in, a menu with pictures and translations in five languages, or is right next to a major tourist attraction, it’s a guaranteed rip-off.

I once made the mistake of ordering seafood in a restaurant along Lisbon’s Rua Augusta. The menu looked decent, and I was craving a seafood platter. The bill? €40 for a meal that wasn’t even that great. The next day, I ate at a tiny tasca outside the tourist center and had fresh fish, wine, and dessert for €12. Lesson learned.

How to find budget-friendly, authentic places:

• Look for “Prato do Dia” (dish of the day) menus, where you can get a full meal for €10–€15.
• Check where locals are eating. If it’s packed with Portuguese people on their lunch break, it’s probably good.
• Go to places without English menus—or at least ones where English is an afterthought.

Best budget-friendly foods:

• Bifana (pork sandwich) – €3–€5
• Sardines or fresh fish – €8–€12 at a local tasca
• Set lunch menus – €10–€15 for soup, a main, a drink, and coffee

3. Skip Overpriced Guided Tours—Do It Yourself

Many popular tours in Portugal are massively overpriced. Tour operators know that visitors want to see Sintra, Douro Valley, or the Algarve, so they package these places into day trips that sound great—but cost €80–€150 per person.

The reality? You can do almost all of these trips yourself for a fraction of the cost.

Overpriced Tour vs. DIY Alternative:

• Sintra Day Trip
  • Tour price: €70+ per person
  • DIY price: €10–€15 round-trip train ticket + €12 Quinta da Regaleira entry fee (skip overpriced Pena Palace).
  • Total savings: €50+ per person.
• Douro Valley Wine Tour
  • Tour price: €100+ per person
  • DIY price: €20 train to Peso da Régua + €10–€20 for tastings at small, family-run wineries.
  • Total savings: €60–€80 per person.
• Benagil Cave Boat Tour (Algarve)
  • Tour price: €40–€50 per person for a crowded 30-minute boat ride.
  • DIY price: Rent a kayak for €15–€20 and explore at your own pace.
  • Total savings: €25+ per person and a better experience.

If you prefer a guide, look for free walking tours in Lisbon and Porto—you’ll get a local’s insight, and you can just tip what you think it’s worth.

4. Use Public Transport Passes Instead of Single Tickets

I wasted so much money during my first trip by buying single metro tickets every time I needed to get somewhere. What I didn’t realize? Public transport passes are way cheaper.

• Lisbon & Porto 24-hour transport pass – €6.60, covers metro, trams, and buses (a single ticket is €1.80, so if you take at least four rides, you’re already saving).
• Intercity trains (book in advance!) – A Lisbon to Porto train can be €20 instead of €50 if you book early.

Why this saves you money:

• No need to buy tickets each time.
• Unlimited rides for a fixed price.
• Trains are way cheaper if booked ahead (buy online at cp.pt).

5. Visit in the Offseason (Spring or Fall) to Avoid High Prices

Visiting Portugal in July or August is a financial and logistical nightmare. Prices for hotels double or triple, the beaches are packed, and everything is more expensive and less enjoyable.

The best times to visit?

• April to June – Warm weather, fewer tourists, and way better prices.
• September to early November – The summer crowds leave, the ocean is still warm, and flights and hotels are much cheaper.

On one trip, I visited the Algarve in May—perfect beach weather, no crowds, and half the price of what I would have paid in August. Another time, I made the mistake of visiting Lisbon in mid-July, and the combination of overpriced accommodation, long restaurant waits, and 35°C heat made it miserable. Never again.

Why this saves you money:

• Hotels and flights are significantly cheaper.
• Less competition for accommodation, so you get better deals.
• Fewer crowds mean a more relaxed, enjoyable trip.

Portugal isn’t as cheap as people think, but if you travel smart, you can still experience it without overspending.

Biggest Money Traps to Avoid:

• Overpriced hotels and Airbnbs in Lisbon & Porto’s tourist centers.
• Tourist-trap restaurants in busy areas.
• Expensive guided tours that can be done for half the price on your own.

Easiest Ways to Save Money:

• Stay outside the main tourist areas.
• Eat at tascas and bakeries.
• Use public transport passes instead of buying single tickets.
• Visit in the spring or fall to avoid high-season prices.

Conclusion: Is Portugal Still Budget-Friendly?

So, is Portugal still the budget traveler’s dream it’s often made out to be? Yes—but only if you’re strategic about it.

There was a time when Portugal was genuinely cheap. Accommodation was a steal, food was incredibly affordable, and you could explore the country without spending much. But those days are fading fast. Tourism has exploded, prices have risen, and Lisbon and Porto are now Western European cities with Western European price tags.

That said, Portugal is still one of the best-value destinations in Europe—if you know where to spend and where to save.